Greek Cypriot police arrested two Israeli men on suspicion of spying November 7, 1998 in Ziyi.
The two were found with electronic surveillance equipment and recordings of police or military conversations.
Police revealed that the men telephoned an intelligence institute in Tel Aviv just before their arrest and there was an important military operation in the area at the time.
They'd visited Ziyi twice the month before.
Their previous visit coincided with a Greek Cypriot military exercise off the coast.
Speculation in the press suggested they might have been conducting a training exercise or supplying information regarding Cyprus' purchase of Russian S-300 anti-aircraft missiles to Turkey.
Some speculated their arrest was meant as a warning to Israel not to provide military assistance to Turkey in its fight against Greek Cyprus.
Israel and Turkey had significantly increased military cooperation in recent years.
Eventually, Israel admitted the men were agents of its intelligence agency, Mossad, but assured they were not acting against Cyprus or on behalf of Turkey.
A senior Mossad official was forced to resign.
The situation strained Israeli-Greek Cypriot relations.
At their trial, the defense claimed the two were civil servants involved in anti-terrorist operations not aimed at Cyprus.
However, the court found no evidence to substantiate the claim.
The two were sentenced to three years in prison on lesser charges.
They were pardoned in August 1999 as a goodwill gesture.
In March 2000, Cyprus President Glafcos Clerides was to visit Israel to cement Israeli-Cyprus ties shaken by the scandal.
